Dec. 7 (UPI) -- An OPEC meeting where announcements of production cuts had long been expected had so far Friday failed to yield to an accord to cut output.
Several members of the Organization of Petroleum Exporting Countries declined to follow Saudi Arabia's attempt to lead, but an announcement of cutting at least 500,000 barrels per day is nearly assured, an analyst said.
IranOilMinistry tweeted just before 7:00 a.m. EST on Friday that "no agreement had so far been struck between OPEC members."
Iran "does not endorse [an] OPEC production cut plan," it added.
Iran, with crude oil production of 3.6 million barrels per day in the third quarter, down from 3.8 million barrels per day in the first and second quarter, is a founding member of the organization.
Qatar pulled out of the organization at the start of the week, leaving the six-decade old group with 14 members, because of this, it claimed. Qatar said Monday it pulled out to focus on natural gas.
Iran's oil ministry document said the country disliked recent moves by Saudi Arabia to seek to take decisions in coordination with Russia, instead of working with fellow OPEC members.
Saudi Arabia Energy Minister Khalid Al-Falih said on Oct. 23 that the kingdom had increased production from 9.9 million barrels per day to 10.7 million barrels per day.
Saudi Arabia wanted to help balance the world oil market, in case of any supply disruption caused by United States nuclear sanctions against Iran. Saudi Arabia at that time said that the kingdom wanted to work in coordination with OPEC and non-OPEC members including Russia to help the market reach a balance.
Iranian officials replied at the time saying that no country had enough capacity to replace Iranian oil exports.
As the sanctions that the U.S. announced in May went into effect Nov. 5, U.S. President Donald Trump's administration unexpectedly announced waivers to eight nations including to three very large buyers of Iranian oil.
This changed concerns about lack of supplies to concerns of oversupplies, kicking off a decline in the price of oil. The price of Brent crude oil has gone down from over $86 per barrel on Oct. 3 to its current level just over $60 per barrel.
Other OPEC members, like Venezuela, cannot afford to make any production cuts amid severe economic problems that have already taken the country's oil output, unwillingly, to their lowest levels in decades. Venezuela reached an accord with Russia, announced Thursday, that will lead to a $5 billion investment to help the country recover its lost output.
Further compounding problems, the Saudi Crown Price Mohammed bin Salman, has been implicated in a recent diplomatic row between Turkey, the U.S. and Saudi Arabia.
Turkey is probing the killing of Saudi Arabia journalist Jamal Khashoggi, a Washington Post columnist murdered within the Saudi Arabia consulate in Istanbul in October. Khashoggi had reported about discontent within Saudi Arabia's royal and business elite with Mohammed bin Salman. U.S. senators said earlier this week that U.S. intelligence indicates the crown prince was involved in the killing.
"It is essential that we look to move ahead with a more permanent relationship with our non-OPEC producers. I look forward to your support in delivering the right decisions during our meeting today and your backing for a positive resolution with our non-OPEC friends on Friday," a statement from Suhail Mohamed Al Mazrouei, United Arab Emirates Minister of Energy and Industry, and President of the OPEC Conference.
As for Russia, a statement released by state news agency Tass around 7:12 a.m. EST quoted Energy Minister Alexander Novak saying the country would try to come to an agreement, but did not hint how much would Russia be willing to reduce.
Tass said that in addition to Iran and Venezuela, another obstacle was that Libya and Nigeria wanted to continue to be exempt from any reductions.
"The cooperation agreement widely known as the OPEC+ deal, expires this year. Meanwhile, it is anticipated that today the ministers are going to sign a new charter with no fixed term that will seal cooperation starting on January 1, 2019, Tass said. The Russian news agency report mentioned another media press report saying Russia could agree to reduce 200,000 barrels per day.
Any decision by Russia would be key for an accord for a production cut. Traders had said in a previous session that the market had discounted a production cut of anywhere from 1.1 million to 1.4 million barrels per day by OPEC and non-OPEC nations, with anything below that potentially leading to crude oil price declines.
"Russia remains inscrutable. My guess is that we get a 1 million barrel per day rate cut, mostly from Saudi Arabia, with minimal help from Russia," said Matt Badiali, senior research analyst at Banyan Hill Research specializing in oil and commodities.
"The fact is, there will be a production cut. Saudi Arabia simply can't maintain its high pace. I wouldn't be surprised to see them announce that they will 500,000 barrels per day themselves. The Saudis also need much higher prices. I've seen estimates as high as $70 per barrel to keep the state running. That means they need to cut production son," Badiali added.
Russia, Saudi Arabia and the United States are the world's three biggest crude oil producers, with the U.S. surpassing their output earlier this year and pumping crude at record-high levels, thanks to technology advancements in recent years. Only Saudi Arabia is in OPEC.